Rates and thresholds
|Nil rate band||£325,000||£325,000|
|Tax paid on legacies on death||40%||40%|
|Tax paid if at least 10% of net estate
is left to charity on death
|Gifts made up to seven years before
death (see lifetime gifts)
|Lifetime transfers to most trusts (note 5)||20%||20%|
- Up to 100% of the proportion of a deceased spouse's/civil partner's unused nil rate band may be claimed to increment the current nil rate band when the survivor dies.
- Gifts or legacies to charities are not charged to IHT.
- If the donor pays the IHT due on a lifetime gift the effective rate is 25%.
- IHT due on a deceased's estate and on gifts within seven years of death is generally due six months after the month of death, but in practice it must be paid before probate is granted.
- IHT on chargeable lifetime transfers to trusts is payable on the later of six months after the month of transfer, or 30 April in the next tax year.
|Reduced tax charge on gifts up to seven years before death|
|Years before death||0-3||3-4||4-5||5-6||6-7|
|Percentage of IHT
death charge payable
Lifetime gifts between individuals ('potentially exempt transfers') are only charged to IHT if the donor dies within seven years of the gift.
|Amount of relief||Conditions|
|£3,000 per tax year||Amount per donor; unused exemption can can be carried forward one year|
|£250 per tax year||De minimis amount per recipient|
|Unlimited||Regular gifts out of surplus income|
|Unlimited||To UK domiciled spouse or civil partner|
|£325,000||To non-domiciled spouse/civil partner|
|£5,000||From parent of party to marriage (see note)|
|£2,500||From party to marriage or from remoter ancestor (see note)|
|£1,000||From any other person (see note)|
Must be made to one or both parties to a marriage in consideration of that marriage. These rules apply equally to those entering a civil partnership.
Business and agricultural property
|Amount of relief||Property and conditions|
|100%||All shareholdings in unquoted trading companies, an unincorporated business or interest in such a business|
|50%||Controlling shareholding in quoted company, land and buildings used by transferor's company or partnership|
|100%||Agricultural value of qualifying farmland and buildings|
In all cases the property must have been owned for at least two years, and other conditions apply.